State Court Deals Major Setback to Effort to Reform and Modernize Maryland Stormwater Permits

by Evan Isaacson

Maryland’s high court ruled last week in favor of the Maryland Department of the Environment (MDE) in a challenge by several advocacy groups against five municipal stormwater (“MS4”) permits issued by MDE. While reading the lengthy opinion on my computer, I felt at times like a raving sports fan yelling at the TV in frustration. My frustration was borne not of the court’s specific arguments, or even of concerns over any far-reaching legal implications of the decision. Rather, to understand why this decision has generated such frustration, it is important to understand the timing and context of this decision.

Generally speaking, court decisions merely upholding existing programs and the status quo, such as in the present case, rarely generate outrage. Moreover, I acknowledge that reasonable minds certainly can differ in interpreting complicated legal matters, as each of the seven reasonable minds on Maryland’s Court of Appeals differed with each of the three reasonable minds on the Court of Special Appeals. But it is difficult for anyone following the implementation of Maryland’s MS4 permits not to be disappointed that the court upheld a series of permits, which have failed to deliver benefits after: six years under the Chesapeake Bay restoration process known as the Bay TMDL; a dozen years under the current MS4 permit structure created by MDE; and three decades since Congress created the statutory concept of an MS4 permit.

The court began its opinion by tracing a path from the basic requirements of the Clean Water Act (CWA) all the way to the specific requirements in the present permits. Along the way, the court made the very direct and important linkage between MS4 permits and Total Maximum Daily Loads (TMDLs), like the Bay TMDL. The MS4 permits, like CWA permits generally, are where the rubber meets the road in implementing many TMDLs, and certainly the Bay TMDL. As the court put it, “flowing from this obligation [the TMDL] is the requirement that MS4s are subject to effluent limitations that are consistent with WLAs [wasteload allocations] of EPA-approved TMDLs.” This is no small matter, as controlling runoff pollution has been among the most important, but elusive, of missions under the CWA. By requiring an MS4 permit to be consistent with properly written wasteload (pollution) allocations of a TMDL, the MS4 jurisdiction is thus on the hook to reduce urban water pollution through the installation or implementation of best management practices and “green infrastructure.” At least that’s the theory.

And this is where the first source of disappointment comes in. As I wrote last November after the court heard oral argument in the consolidated case, the judges wanted to know from MDE counsel “what is taking so long?” Why, after 30 years of MS4 regulation, are we just now getting to the “implementation phase,” as the court called it, where these permit holders are finally being asked to restore polluted urban waters? Why have the permits not been enforced? When will enforcement happen? In a case that boils down to the argument over whether the MS4 permits are enforceable, it should be dispositive that the permits in question have never been enforced – despite persistent failure to meet the permit requirements! Statements made at the oral argument seemed to indicate that the judges were inclined to agree on this point, and gave advocates some hope.

But alas, the opinion focused on the “flexibility” conferred on MS4 permittees by the CWA and emphasized the role of “adaptive management” and “iterative” processes. After refuting the advocates’ arguments that the MS4 permits failed to include specific, measurable, and enforceable requirements, the court countered by referencing the permit’s enforcement language that “failure to comply with a permit provision,” such as the stormwater management or reporting requirements, “constitutes a violation of the CWA and is grounds for enforcement action; permit termination, revocation, or modification; or denial of a permit renewal application.” But the court then ignored the enforcement history of these permits and went on to discuss the value of an iterative approach to implementing (but not enforcing) the MS4 permits. For example, the court highlighted how MDE structured the permits to rely on “reporting, assessment, and adaptation to ensure” that counties make actual progress under their permits. That would be a valid argument if adaptive management had been working all along. But it has not, and it has not proven to be an effective substitute for an enforcement action to motivate compliance or drive real progress.

One key component of this iterative or adaptive management approach that the court seems to sanction is the use of permit modifications. The idea is that if it comes to light after submission of a county’s annual progress report that permittee has fallen behind, MDE could take the extraordinary step of modifying the permit. If only. Had MDE actually modified county permits as soon as a lack of progress had been detected, Marylanders would be a whole lot closer to a restored Bay and healthier urban waters than we are now. But one reason MDE will not modify a permit (aside from the obvious fact that it does not have the political will to take any action, enforcement or otherwise, against lagging counties) is that it would open the permit to another round of public comment. And the lack of public participation has always been a central part of what MDE has fought against in this case.

The last words of the Court of Special Appeals (the lower appellate court) on this case was its reference to the failure by MDE to craft an MS4 permit that considers the “important public policies of transparency, public participation, and meaningful judicial review.” And while the Court of Appeals acknowledged in last week’s opinion that “nowhere are these tensions [between democratic aspirations and a modern and elaborate bureaucracy] more acute than in the domain of environmental policy,” it went on to dismiss not just the arguments and public participation concerns of the advocates in this case – but of EPA itself.

As I write this, EPA is wrapping up the public comment period on a proposed revision to the Phase II MS4 rule (Phase II permits are for smaller jurisdictions). EPA was sued in the Ninth Circuit, lost the case, and was forced into writing a new rule to ensure that MS4 permit applications are subject to adequate public comment and meaningful review from approving authorities at the stage where such things matter. CPR will have more on this in a post next week, but suffice it to say, the impending EPA rule seemed to speak directly to the heart of the matter in this case. As EPA made clear in its proposed rule, public participation is not a perfunctory procedural exercise, but has become a crucial part of the permit and rulemaking processes in modern environmental law where outside experts exert real change to improve agency actions. States that only take comment at step one, but allow permittees to do all the real substantive work at step two, have allowed the permittee to do an “end run” around the public participation process and to engage in illegal self-regulation. While the Court of Appeals discussed the previous Ninth Circuit case in its opinion, it did not apply the lessons of that case or of the current EPA rulemaking designed to make MS4 permit applications subject to greater and appropriate levels of review and comment.

In a different time, the court’s decision may not have elicited much of a reaction. But the court seems satisfied that a permit is enforceable, even though it has never been enforced, and that existing levels of public participation are sufficient – just at the time when even the passive EPA is in the midst of requiring more comment and meaningful review. That’s a difficult pill to swallow for those that have followed the implementation of MS4 permits closely.